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C O N F I D E N T I A L SECTION 01 OF 03 TEL AVIV 000280 
 
SIPDIS 
 
E.O. 12958: DECL: 02/05/2020 
TAGS: PREL PGOV KWBG IS
SUBJECT: BARAK AND FAYYAD PROMOTE THE TWO-STATE SOLUTION AT 
HERZLIYA CONFERENCE 
 
Classified By: DCM Luis G. Moreno, Reason 1.4 (b) (d) 
 
¶1.  (SBU) Summary.  Speaking at a standing room only panel at 
the annual Herzliya Conference February 2, Defense Minister 
Barak and PA Prime Minister Fayyad offered a rare glimpse of 
Israeli-Palestinian convergence as both made the case for the 
two-state solution.  Photographers at the event mobbed both 
men in a failed attempt to snap a picture of a handshake. 
Not surprisingly, however, while both argued passionately in 
favor of two states living in peace, the logic of their 
arguments conflicted on a number of points.  Barak stressed 
that the "Zionist dream" will only be secure once there is a 
peace agreement with the Palestinians.  He called for an 
"internal border" to be established within the "Land of 
Israel" to ensure that Israel becomes neither a bi-national 
nor an apartheid state in the future.  Barak asserted, 
however, that while there should be no doubt that the 
majority of Israelis want peace, the position of the 
Palestinian side is less clear.  Barak urged the 
international community to press the PA to resume 
negotiations, adding that while he expects a final status 
agreement to take more than two years, the time has come to 
get started, with an emphasis on top-down and bottom-up 
simultaneously. 
 
¶2.  (SBU) Fayyad, in a rare appearance before an Israeli 
audience, said the Palestinians accept Barak's call for a 
two-state solution and asserted that they have accepted 
Israel's right to exist since the 1993 Oslo agreements.  The 
problem, Fayyad noted, is that negotiations have not led to 
the desired outcome.  Security, stability and peace can only 
be achieved through Israel's acceptance of a Palestinian 
state.  Noting the current impasse, Fayyad said Palestinians 
need a "new dynamic" that makes clear that negotiations will 
lead to a state.  After detailing the accomplishments of his 
government over the past year, Fayyad called for Israel to 
freeze settlement construction and end IDF incursions into 
PA-controlled areas in order to show Palestinians that the 
"occupation is being rolled back."  He stressed that 
Jerusalem must be on the negotiating agenda since East 
Jerusalem is an "integral part" of Palestinian territory. 
There can be no lasting peace, he stressed, without 
Palestinian control of East Jerusalem.  Fayyad said he was 
proud to call his two-year plan for building the institutions 
of a state "unilateral" since it was being carried out as a 
Palestinian initiative.  State-building reinforces but does 
not replace a negotiating process, he said, but added that 
within a year and a half, the state-building process will 
reach a "critical mass" for Palestinian independence even if 
a final status agreement has not been reached.  Lastly, 
Fayyad called on Israel to "lift the siege" on Gaza, 
suggesting that opening the crossings would enable the PA to 
reestablish itself in Gaza, though he did not explain how 
that would occur.  He also called for an "end to the 
separation" between Gaza and the West Bank as a necessary 
condition for Palestinian independence, but did not address 
how this would take place.  Israeli commentators have 
generally applauded Fayyad for having the courage to address 
the Herzliya Conference, but many have stressed both his 
not-so-veiled threat of a unilateral declaration of statehood 
in 2011, as well as the absence of a mechanism for addressing 
the division between the West Bank and Gaza.  End Summary. 
 
Barak Sees Threats and Opportunities 
------------------------------------ 
 
¶3.  (U) Barak began his remarks  (Note:  speaking throughout 
in Hebrew, all translations are ours) with a review of the 
strategic situation facing Israel, noting that while quiet 
now prevails on all fronts, there are "threats on the 
horizon" from Iran, Hamas and Hizballah, "the like of which 
we have not faced in decades."  Barak commented that the 
Middle East has "no mercy for the weak," so Israel must 
maintain its deterrence and demonstrate that it cannot be 
defeated if it wants to survive.  Only on this basis can 
Israel reach agreements with its neighbors, Barak said, but 
added that the alternatives to pursuing peace are all bad. 
Israel can remain a Zionist, democratic state only through 
peace agreements with its neighbors. 
 
¶4.  (U) Today there are 12 million people living between the 
Jordan River and the Mediterranean, five million of them 
Arabs.  If this area remains one state, it cannot remain 
Jewish and democratic, Barak observed, adding that neither a 
bi-national state nor an apartheid state will fulfill the 
Zionist dream.  Therefore, a border must be imposed within 
the Land of Israel, not as a favor to the Palestinians but in 
the interests of future generations of Israelis.  Barak 
cautioned that Israel faces growing international isolation 
because the international community will not accept a 
permanent occupation.  Israel is strong, he stressed, and can 
 
TEL AVIV 00000280  002 OF 003 
 
 
afford to allow itself to move forward. 
 
¶5.  (U) Barak admitted that Israeli society is divided and 
addressed himself to both the right and the left.  To the 
right, he said those who believe in the Land of Israel must 
accept the setting of a border not because Israel has no 
right to the land, but because Israel's interests require it. 
 Barak noted that ancient Israel's borders shifted 
continually, and Jewish leaders of the ancient world 
understood the necessity of flexibility.  To the left, Barak 
said Israel has a responsibility to defend its people and 
Jews everywhere.  Israel must seek a "sober peace," not an 
illusion.  He appealed to the left to help the Netanyahu 
government make peace with the Palestinians rather than 
follow the "Trotskyite" formula of "making things worse in 
order to make them better."  Israel needs security, he said, 
but also to move forward. 
 
¶6.  (U) Barak said he had told Abu Mazen that he needed to 
tell the Palestinian people that the time has come to make 
peace and "give up their dreams" (i.e. the return of 
refugees).  Barak asserted that while he had no doubt that 
the majority of Israelis want peace, the Palestinian position 
was less clear.  Barak then praised PM Fayyad for his 
state-building project of developing the PA's institutions, 
security services and developing the economy.  Barak said he 
believes in developing the Palestinians' capabilities.  While 
Israel is not ready to cede security responsibility for the 
West Bank, Barak noted that even the settlers recognize the 
emergence of a "new security environment" in the West Bank 
through cooperation between the IDF and the PASF. 
 
¶7.  (U) Noting that "good fences make good neighbors," Barak 
observed that the "Arab discourse" has changed since the 
"three no's" of Khartoum in 1967.  Israel cannot accept the 
Arab Peace Initiative as drafted, but it provides a framework 
with which to work.  Turning to Gaza, Barak noted the 
security challenges posed by Hamas and said Israel will not 
allow the West Bank to follow the model of what followed the 
withdrawals from southern Lebanon and Gaza. 
 
¶8.  (U) Barak said negotiations will take time to produce an 
agreement, "probably more than two years," but they must get 
started.  The core issues are known to all and should all be 
dealt with at the same time.  If there are proximity talks, 
they will only be an instrument to get negotiations started. 
The Netanyahu government accepts the Road Map, all past 
agreements, and the two-state solution.  Progress toward 
peace must be bottom-up as well as top-down.  Barak appealed 
to the international community to send a unified message to 
the Palestinian leadership that the time has come to resume 
negotiations.  The Arab states, and especially the Gulf, can 
help by providing financial support for the PA.  Israel needs 
a Palestinian state to achieve its own interests he concluded. 
 
Palestinians Agree and Accept Two-State Solution 
--------------------------------------------- --- 
 
¶9.  (U) Fayyad began by noting that he had expected to debate 
Barak in a panel format and had not come prepared to give a 
speech.  He then launched, in English, into an articulate 
demand for Palestinian independence within two years.  Noting 
that Barak had made a compelling case for a two-state 
solution from an Israeli perspective, Fayyad said the 
Palestinians agree and accept the two-state solution.  He 
stressed that the Palestinians have recognized Israel's right 
to exist since the 1993 Oslo Agreements, but Israel at that 
time did not accept the Palestinians' right to a state. 
Negotiations since then have not produced the desired 
outcome, even though that entire international community has 
embraced the goal of a Palestinian state since President 
Bush's speech in the summer of 2002. 
 
¶10.  (U) Fayyad agreed with Barak that the Middle East is a 
rough and troubled region, but asserted that it can be made 
less rough by Israeli steps to end the occupation.  The 
Palestinians want to live beside Israel in dignity, in a 
permanent and lasting peace.  Fayyad said the Arab Peace 
Initiative provides a framework that would bring a sense of 
greater security to the entire Middle East.  Security, 
stability, and peace are the Palestinians' driving force, but 
only if Israel accepts the concept of a Palestinian state. 
 
¶11.  (U) Fayyad acknowledged that the process is at an 
impasse.  Many years have been spent on negotiations, so we 
must learn the lessons from past negotiations.  Palestinians 
now need a "new dynamic."  The process needs to being to 
evolve in a manner that makes clear that negotiations lead to 
a state.  Palestinians are determined to prepare themselves 
for statehood and are getting the institutions of government 
going in all spheres.  Security, he noted, is important to 
 
TEL AVIV 00000280  003 OF 003 
 
 
everyone, not just to Israelis. 
 
¶12.  (U) After losing Gaza, the PA focused on establishing a 
sense of security and law and order.  Noting that the Road 
Map assumes progress toward a Palestinian state, Fayyad said 
Israel's obligations are to accept conditions consistent with 
a state.  That includes a freeze on settlements and stopping 
IDF incursions into Palestinian-controlled areas, where the 
PASF are capable of providing security.  Israel must show 
that the occupation is being "rolled back."  Fayyad commented 
that Palestinians are sensitive to Israeli security needs, 
but there can be no security for anyone unless there is 
security for all.  The PA should have a formal security 
presence outside of Area A in order to help give them the 
sense that the occupation is ending. 
 
¶13.  (U) Turning to Jerusalem, Fayyad noted that East 
Jerusalem was occupied in 1967 and is an integral part of 
Palestinian territory.  He cautioned Israelis that there can 
be no lasting peace without Palestinian control of East 
Jerusalem.  Asking rhetorically why Palestinians have 
insisted on a settlement freeze this time, Fayyad said that 
settlements are expanding on land on which a Palestinian 
state is supposed to be established.  If the Israeli 
Government cannot even freeze settlements, how can the 
Palestinians have confidence that negotiations will produce 
results? 
 
¶14.  (U) Fayyad said his government is assuming the 
responsibilities of a state by delivering services to the 
people.  Noting that some have called this unilateralism, 
Fayyad stated that it is and should be unilateral since the 
Palestinians are now building their own state. 
State-building reinforces the negotiating track, but is not a 
substitute for negotiations.  The PA, he stressed, will step 
up its efforts in order to be ready for statehood by the end 
of 2011.  Fayyad said the PA has made great progress during 
the past two years, for example implementing over one 
thousand community projects and establishing a 
well-functioning central bank. 
 
¶15.  (U) Fayyad declared that by the end of 2011, the 
achievements on the ground will reach a "critical mass."  If 
there is not a final status agreement by that time, he 
cautioned Israelis that these achievements will "put great 
pressure" for the establishment of a state anyway.  The 
Palestinians' partners in the international community will 
not continue to invest in the PA without a sense that the 
outcome will be a state. 
 
¶16.  (U) Turning to Gaza, Fayyad said the Palestinians must 
be unified, the division between the West Bank and Gaza must 
end.  He called for Israel to "lift the siege" on Gaza, 
calling Israeli policy "both wrong and wrong-headed." 
Lifting the siege would help the PA reestablish itself in 
Gaza he asserted, without further comment.  Palestinians have 
the right to hold elections, but cannot do so without 
unification with Gaza.  Again without elaborating, Fayyad 
said a solution requires the end of the internal Palestinian 
division. 
 
¶17.  (U) Appealing to Israelis on a human level, Fayyad 
admitted both peoples have suffered and noted that their "two 
diametrically opposed narratives" cannot be changed.  He 
concluded by reiterating that Palestinians aspire to live in 
peace in their own state beside Israel. 
 
¶18.  (C) Comment.  Barak's message that a Palestinian state 
is an Israeli imperative is not new, but sounded more like 
the arguments of opposition Kadima party leader Livni rather 
than those of PM Netanyahu, whose acceptance of Palestinian 
statehood is always accompanied by a series of caveats. 
Barak's security requirements are in fact the basis for 
Netanyahu's position, but perhaps in deference to Fayyad, 
Barak chose only to make a vague reference to a "sober peace" 
rather than spell out his thinking on Israel's security 
requirements as he sees them.  Israeli commentators in the 
past few days have generally praised Fayyad's courage for 
addressing a largely Israeli audience in a forum 
traditionally associated with the security-minded Israeli 
center-right, but they have also found fault with both his 
implied threat of state-building leading inexorably to 
statehood by the end of 2011 regardless of negotiations, as 
well as the vagueness of his rhetoric about resolving the 
divide with Gaza. 
Cunningham